Welsh Labour has “spiked Plaid Cymru’s guns” by fusing social democracy with “soft nationalism”, according to one of the party’s key intellectual gurus.

In a revealing article for the Institute of Welsh Affairs’ journal The Welsh Agenda, Professor Michael Sullivan of Swansea University explains why he thinks Labour has managed to retain its position as the dominant party in Welsh politics.

He states: “One of the consequences of devolution was to create a space for a different interpretation of social democracy in Wales and Scotland where Labour continued to adhere to the older definition. Labour-led administrations in Cardiff and Edinburgh retained Old Labour’s commitment to the welfare state as an engine of equality, social justice and social inclusion based on the political values of universality and social solidarity.

Prof Sullivan argues that after 2007 such policy differentiation was accompanied by an even more substantial change, the ‘One Wales’ coalition between Labour and Plaid Cymru: “For both Welsh Labour and Plaid Cymru social policy has played a part in nation building. Prior to devolution Labour could present devolutionary ambitions as an opportunity to craft Welsh solutions to Welsh problems,” he writes.

The Welsh Government has used the new powers it gained in 2006 and 2011 to introduce a raft of legislation on social care, environmental issues, school transport, the use of the Welsh language and children’s rights, says the academic: “The red-green Labour Plaid coalition that emerged from the 2007 election put constitutional change at the top of its programme for government, including a commitment to a referendum on primary lawmaking powers and a commission that looked at the fairness of the Barnett Formula, which determines how Wales is funded.

Prof Sullivan states: “The proposition embedded in ‘One Wales’ – of Labour formally breaking bread with the supposedly hated nationalists – was the first and so far the only truly seismic post-devolution shift. What it ultimately signified was a general recognition of Welsh Labour’s evolution since 1998 into a particular type of soft-nationalist party, espousing what might be called a ‘One Wales’ identity politics.

“In doing so it has operated within a post-devolution consensus in Cardiff Bay to which all the major parties, even to an extent the Tory Group, adhere.

“Inside the ‘One Wales’ cultural milieu, Welsh Labour’s rhetoric has trumpeted the particularity of a ‘small nation’ and people with ‘Welsh values’ and ‘Welsh attitudes’ declared to be very different to ‘the English way’. In turn they make ‘Made in Wales’ policy solutions necessary to match.

"Every element in ‘One Wales’ which caused critics to denounce it as a nationalist Trojan horse – the focus on Barnett, more powers and promoting Cymraeg – are now owned by Welsh Labour. They are basic points of Carwyn Jones’ political philosophy. The result is a broadly soft-nationalist consensus. Arguably it has spiked Plaid’s guns.

“Where critics within Welsh Labour saw ‘One Wales’ as a vehicle to take the nationalists to the ‘gates of independence’, the actual legacy has been Plaid’s decline to third party status. After all, if there are two social democratic, soft-nationalist parties in Wales, doesn’t one become surplus to requirements?

“Exactly how all this plays out is dependent – in large part – on Plaid keeping its implicit promise to ensure Welsh Labour is honest, nationalist and social democratic.”

Meanwhile, in a blog posting for Labour’s oldest think tank the Fabian Society, Shadow Welsh Secretary Owen Smith has expressed the view that the Labour Party “is one of the great uniting institutions of 20th century Britain and our mission from the start has been to bring people together and build with them a more equitable society and a just economy”. He added: “Today, in the 21st Century, that mission is as important as it ever was. Perhaps more so, as this Tory-led government deepens the divides, in wealth and power, between those who have the most and those with the least.”

Mr Smith, who together with Shadow Cabinet colleagues is devoloping Labour’s policies on devolution for the party’s general election manifesto in 2015, states: “{Nationalism}, in Scotland as elsewhere, is all about the selfish gene.

“Its ‘I’m all right Jack’ philosophy is little different in its effect from the divisive ideology of the right, though founded on ethnicity rather than class, or wealth or Boris Johnson’s IQ test.

“Labour rejects nationalism’s division based on blood and soil, though we recognise, respect and cherish the national identities which issue from it. Our ideology is about strength through unity, in Britain and internationally, and even the existence of a hard-line right wing Government in Westminster should not shake our faith that we are always better together.

“That is why devolution, however difficult or imperfectly formed, is the right framework within which we both empower and celebrate national identity and local autonomy, while maintaining a core of state-wide provision and protection.

“However devolution is a process not an event, and it is incumbent on Labour to reflect on how the settlement might further evolve, expand and reach its fullest potential: how we might strengthen Scotland, Wales – and England too – within the uniting framework of the Union. Incumbent on us, in particular, because our credentials as the party of devolution are unimpeachable: we campaigned for it for 100 years and more and in 1998 we delivered it, ‘winning power to give it away’, as Bevan once urged us.

“That will mean Labour articulating a new and compelling vision of devolution within the one nation of the British state, one which confronts the legitimate concerns about the centralisation of resources and power in Whitehall that are expressed throughout Britain. And one which is radical and trusting of the British people to exercise fuller control over their countries, cities, counties and communities.”